Wednesday, 19 April 2017

Navy blames “strategic partner” delay for scuttling build of six submarines to follow the Scorpene class

Project 75-India to build six
subs being re-evaluated (above: INS Kalvari, the navy's first Scorpene)

By Ajai Shukla

Business Standard, 19th April 17

The navy’s warship procurement chief
admitted on Tuesday that key purchases, including the vital procurement of six
new submarines, were foundering on the defence ministry’s failure to finalise a
“strategic partner” (SP) policy.

Under the SP policy, the ministry was to nominate
select Indian defence companies as designated partners for foreign vendors to
build weapons platforms in India. Separate SPs were to be chosen in ten production
areas, such as warships, submarines, aircraft, helicopters, etc.

Over the last two years, the defence
ministry has overshot numerous self-imposed deadlines for announcing the SP
policy. The Defence Procurement Policy of 2016 (DPP-2016) was released last
year with a blank space for the chapter on SP policy.

Today, Vice Admiral DM Deshpande, the navy’s
Controller of Warship Production and Acquisition (CWPA) became the first senior
officer to admit to the possibility that the defence ministry might fail to
promulgate an SP policy at all.

Explaining the delay in contracting for six
submarines to be built under Project 75-India, Deshpande linked it with the
absence of an SP policy, which was needed to nominate an Indian firm to build
the submarines in partnership with a foreign vendor.

“We need those submarines badly because our
force levels are depleted. And in case the SP model doesn’t go ahead, for
whatever reasons, then we will have to look elsewhere”, said Deshpande.

He admitted that there had been “a fair
amount of progress on the SP model, but as things had changed”, the project had
to be looked at afresh.

Business Standard first reported almost a year
ago (May 9, 2016 “Ministry of Defence
struggles to nominate private sector ‘strategic partners’”) the deep
divisions between the ministry, industry and military on the modalities for
choosing SPs. Given that firms nominated as SPs would benefit enormously from production
contracts, defence ministry bureaucrats fear their choices might expose them to
future allegations of bias.

Deshpande outlined the navy’s alternatives
for submarine production if the SP policy failed to take off. He said the navy
might opt for a more advanced version of the six Scorpene submarines already being
built at Mazagon Dock, Mumbai under Project 75; or a separate
government-to-government contract; or a third choice entirely.

“If strategic partnership (SP) happens, we
will be better off for that. But if that doesn’t happen, all these options come
to the fore and we will have to take a call”, he said.

The scuppering of the SP policy, which
former defence minister Manohar Parrikar made a key pillar of his touted “Make
in India” initiative, would set back key defence procurements like Project
75-India by at least two years.

Stating that the navy was preparing
contingency plans, Deshpande admitted there would be “some sort of time penalties”
in implementing alternatives.

This is a worrying prospect for a navy
that, as Deshpande spelt out to an industry gathering in New Delhi today, is
aiming to increase its strength to 170-180 ships (from the current 140 vessels)
and 400 aircraft by 2027.

The absence of a SP policy is hitting more
than just submarine production. The air force has issued a Request for
Information (RFI) to global aerospace vendors for building single-engine
fighters in India in partnership with an Indian company. But, without an Indian
firm nominated as SP for aircraft production, global firms remain unclear who
they must partner in preparing their bids.

The idea of private sector SPs is the
brainchild of the Dhirendra Singh Committee that the defence
ministry-constituted in 2014-15. Subsequently, the VK Aatre Task Force was
asked to specify criteria for nominating firms as SPs.

In its report, it recommended designating
one private sector SP for each of seven technology areas --- aircraft;
helicopters; aero engines; submarines; warships; guns and artillery, and
armoured vehicles. Simultaneously, two strategic partners each were to be
recommended for three other technology segments --- metallic materials and
alloys; non-metallic materials; and ammunition, including smart munitions.

3 comments:

Let the MOD wake up at least now. Navy is the arm of India that will be the most useful in the imminent clash of arms between India and China, which will take place likely within 2 years. Is there a doubt in anyone's mind? None in mine.

The shortage and obsolescence of existing fleet of submarines is a big goof up by MoD. We have lost so much time. Instead of wasting time and resources on IAC-2, we need to quickly ramp up 30 sub navy .The problem with this blog is, it often is aimless writing, doesn't put out any strategic thought .Here you talk of submarines, next article is aircraft carrier . Let us have our priorities straight. Money and resources are limited.